Big Oil: How Safe Are The Dividends?

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Rupert Hargreaves
Published on
Updated on

Income-focused investors with a low-risk tolerance have historically looked too big oil to meet their income demands. However, the collapse in oil prices over the past 12 months has sharply reduced earnings and cash flow across the sector. Capex budgets have been slashed, cost reductions have been demanded of oil service providers and staff numbers have been reduced across the sector. If oil prices remain depressed (as many forecasts are predicting) deeper cuts to spending can be expected. But what about dividends? Few oil companies have cut or frozen their dividends during the past year (Eni is the notable exception), and…

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Sign up now and get our in-depth FREE e-books on famous investors like Klarman, Dalio, Schloss, Munger Rupert is a committed value investor and regularly writes and invests following the principles set out by Benjamin Graham. He is the editor and co-owner of Hidden Value Stocks, a quarterly investment newsletter aimed at institutional investors. Rupert owns shares in Berkshire Hathaway. Rupert holds qualifications from the Chartered Institute For Securities & Investment and the CFA Society of the UK. Rupert covers everything value investing for ValueWalk